Aareal Bank AG reached an agreement with the German association Bundesverband deutscher Banken to acquire all shares in Düsseldorfer Hypothekenbank AG for a preliminary purchase price of approximately €162 million.
The final purchase price will depend upon market fluctuations until the closing date. Subject to regulatory approval, the deal is expected to close in 2018, the lender said in a Sept. 10 statement.
Aareal Bank said the transaction will lead to a positive one-off effect from initial consolidation in the amount of €52 million. It also expects its operating profit for 2019 to be impacted by the deal "in a very low double-digit million amount."
Assuming the deal will be finalized in 2018, Aareal Bank said it will increase its 2018 full-year profit forecast, with consolidated operating profit — including the one-off effect of the transaction — to be in the range of between €312 million and €352 million, compared to its previous profit forecast of between €260 million and €300 million. EPS is expected to be between €3.47 and €3.87.
The lender added that it will continue Düsseldorfer Hypothekenbank's orderly run-down process that began in 2015.